Robert Picard, Head of Private Markets Solutions for Hightower, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss the benefits of long-term allocations to private markets for individual investors.
Hightower supports 140 separate advisor practices with $165 billion in wealth management assets. Hightower allows the advisor practices a certain amount of autonomy, as each advisor is a fiduciary who knows what is best for their clients.
Hightower has a team with deep experience in evaluating private market opportunities. Picard notes that college endowments and billionaires allocate an average of 50% of their assets to private markets, while individual investors allocate an average of 5% to private markets. Over the last 3, 5, 15, and 30 years, a portfolio with a 20% to 30% allocation to private markets generates higher yields, higher returns, and lower volatility. Investors are moving toward 40/30/30 portfolios, invested 40% in public equity, 30% in public fixed income, and 30% in private markets.
Today’s CEOs have navigated numerous crises over the last five years, including the COVID-19 pandemic, supply chain disruptions, rising interest rates, and forty-year highs in inflation. The private credit market facilitates access to capital for these battle-tested firms. Private credit managers are highly flexible, offering bespoke solutions tailored to the specific needs of each borrower.
Hightower works to educate investors and advisors on private markets, hosting visits and webinars with top asset managers. Picard states that 91% of all US companies with revenues over $100 million are privately held and founder-led. Allocating to private markets invests in the future of our economy and forces investors to take a long-term perspective. Hightower is building straight-through processing with the goal of making private market investment processes much simpler for advisors.
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